Finance Minister Yigal Hurwitz submitted a note of “conditional” resignation to Premier Menachem Begin during the Cabinet meeting yesterday. He said he would not hesitate to carry it out unless an acceptable compromise is reached in his dispute with Education Minister Zevulun Hammer over pay raises for teachers.

Hammer supports the raises, recommended by the Etzioni Commission. (See Jan. 5 Bulletin.) Hurwitz insists that no pledge be given the teachers beyond a promise to discuss their pay demands a year from now. He contends that raises for teachers would trigger wage demands in other sectors, leading to the collapse of his efforts to contain inflation. The Cabinet avoided a showdown on the issue yesterday when it instructed Hurwitz and Hammer to sit down with Begin “with a view to reaching an agreement.”

CLASSES SUSPENDED FOR ONE HOUR

But neither minister had budged from his position today. The teachers meanwhile, accused the government of “footdragging” over their raises. Classes in all Israeli schools were suspended for one hour today while the teachers, on union orders, held staff meetings to protest the government’s inaction. Union officials said tonight that there would be no further job actions. But both the elementary school and high school teachers’ unions have filed formal notice of a “labor dispute.” This entitles them, under law, to call a full-scale strike in 15 days.

Hurwitz reportedly wrote his resignation notice by hand during the weekly Cabinet session. Legal experts were uncertain as to whether it can be regarded as a formal letter of resignation. Apparently its purpose is to permit Hurwitz to leave the Cabinet if Begin decided to “go to the President” to submit the resignation of his government.

Israeli law does not permit a Cabinet member to resign from a “lame duck” or caretaker government that remains in office pending elections.

Political sources said the crisis would come to a head at next Sunday’s Cabinet meeting unless Hurwitz, Hammer and Begin reach agreement on

the teachers’ pay dispute. Most observers are not optimistic that they will.

Hammer met with teachers union officials this evening to report on some compromise formulas brought up at yesterday’s Cabinet meeting. They were rejected out of hand by the teachers. Hammer, a leader of the National Religious Party (NRP), Likud’s principal coalition partner, has indicated that he would resign if the pay hikes were not approved.

Hammer’s close political ally, Yehuda Ben-Meir said today that the NRP would “have to think hard about the future of the government” if the Education Minister was forced to resign over the teachers pay issue. He noted, too, that the NRP was not consulted and had no part in Begin’s current negotiations with the three-man Ahva faction which may enter the government if Hurwitz quits and pulls out his Rafi faction.